Olympic Peninsula Narcotics Enforcement Team v. Junction City Lots 1 Through 12 Inclusive, Block 35
| Decision Date | 06 September 2018 |
| Docket Number | No. 95013-0,95013-0 |
| Citation | 424 P.3d 1226,191 Wash.2d 654 |
| Parties | The OLYMPIC PENINSULA NARCOTICS ENFORCEMENT TEAM; Bill Benedict, Clallam County Sheriff; Clallam County Sheriff’s Office ; and Clallam County, Respondents, v. REAL PROPERTY KNOWN AS (1) JUNCTION CITY LOTS 1 THROUGH 12 INCLUSIVE, BLOCK 35, (2) LOT 2 OF THE NELSON SHORT PLAT LOCATED IN JEFFERSON COUNTY, and All Appurtenances and Improvements Thereon, or Proceeds Therefrom, Defendant, Steven L. Fager; DBVWC, INC., a Washington corporation; and the Lucille M. Brown Living Trust, Petitioners. |
| Court | Washington Supreme Court |
James Robert Dixon, Dixon & Cannon, Ltd., 601 Union Street, Suite 3230, Seattle, WA 98101-3949, for Petitioners.
Brian Patrick Wendt, Clallam County Prosecuting, Attorney's Office, 223 E. 4th Street, Suite 11, Port Angeles, WA 98362-3000, Michael Alexander Patterson, Timothy Hall Campbell, Patterson Buchanan Fobes Leiteh PS, 2112 3rd Avenue, Suite 500, Seattle, WA 98121-2391, for Respondents.
Mark Muzzey Cooke, Nancy Lynn Talner, Attorney at Law, 901 5th Avenue, Suite 630, Seattle, WA 98164-2008, for Amicus Curiae American Civil Liberties Union of Washington.
Richard Jonathan Troberman, Attorney at Law, 520 Pike Street, Suite 2500, Seattle, WA 98101-1385, for Amicus Curiae Washington Association of Criminal Defense Lawyers.
¶ 1 This case involves Washington’s civil forfeiture statute and the scope of the attorney fees provision where the claimant is the substantially prevailing party. The forfeiture statute allows law enforcement agencies to seize and take ownership of property that has a sufficient factual nexus to certain controlled substance violations. RCW 69.50.505. However, if someone claims the property and law enforcement cannot prove that forfeiture is authorized, then the claimant is entitled to have the property returned and to receive "reasonable attorneys’ fees reasonably incurred by the claimant." Id. at (6). We are presented with two issues of first impression regarding this attorney fees provision.
¶ 2 First, we are asked who qualifies as a "claimant" when the property at issue is owned by a corporation. We hold that in such a case, a corporate shareholder who did not file any claim in the forfeiture case is not a claimant and therefore cannot recover attorney fees pursuant to the statute’s plain language. We thus affirm the Court of Appeals in part.
¶ 3 Second, we must decide whether a substantially prevailing claimant’s fee award is strictly limited to fees incurred in the forfeiture proceeding itself. The answer is no. The plain language of RCW 69.50.505(6) gives courts discretion to award the claimant attorney fees from a related criminal case if the fees were reasonably incurred for the primary purpose of resisting civil forfeiture. We therefore reverse the Court of Appeals in part and remand to the trial court to enter a corrected fee award consistent with this opinion.
¶ 4 Beginning in 2007, the Olympic Peninsula Narcotics Enforcement Team (OPNET) became suspicious that brothers Steven and Timothy Fager1 were growing and distributing marijuana from a commercial building at 115 Freeman Lane in Port Townsend. OPNET officers conducted surveillance and, in 2009, obtained a warrant for a thermal image search, based on allegations that they could smell marijuana from the street and that the smell was coming from the 115 Freeman Lane building.
¶ 5 Based on the results of the thermal image search, OPNET obtained a search warrant for the 115 Freeman Lane building and "discovered a large, sophisticated, indoor marijuana growing operation." Clerk’s Papers (CP) at 19. The next day, the Fagers were each charged with one count of manufacturing marijuana and one count of possession with intent to deliver marijuana. The criminal cases against the Fagers were consolidated.
¶ 6 On the same day that the criminal charges were filed, OPNET, the Clallam County sheriff, and Clallam County brought this civil forfeiture case against the two parcels of real property on which the 115 Freeman Lane building is located. One parcel belongs to Steven and the other belongs to a corporation, Discovery Bay Village Wellness Collective (DBVWC).2 Steven is the president and registered agent for DBVWC, and the Fagers are both shareholders.
¶ 7 Jeffrey Steinborn timely entered a notice of appearance in the forfeiture case as "Attorney for Claimant Steven Fager." Id. at 31. In January 2010, the parties entered an agreed order staying the forfeiture case pending the outcome of the consolidated criminal cases, which took several more years to resolve.
¶ 8 In their criminal cases, the Fagers moved to suppress the evidence OPNET obtained from searching the 115 Freeman Lane building. After a lengthy hearing, the trial court granted the motion, crediting unrebutted expert testimony "that it would have been impossible for the officers to smell the marijuana" from the distance at which they claimed to smell it. Id. at 80. The court also determined that the officers’ statements "demonstrate[d] a reckless disregard for the truth" and must be suppressed. Id. at 81.
¶ 9 Without those statements, there was no probable cause for the search warrant, and the court therefore suppressed "[a]ll evidence procured as a result." Id. at 84. The trial court then dismissed the criminal cases with prejudice, and the Court of Appeals affirmed. State v. Fager, No. 44454-2-II, 2015 WL 563081 (Wash. Ct. App. Feb. 10, 2015) (unpublished), http://www.courts.wa.gov/opinions/pdf/D2% 2044454-2-II% 20% 20Unpublished% 200pinion.pdf. The State did not seek further review, and the mandate issued on April 8, 2015.
¶ 10 Two and a half weeks later, James R. Dixon entered a notice of appearance in the forfeiture proceeding as "Substitution Counsel for Steve Fager." CP at 46. That same day, "Steven Fager and the Discovery Bay Village Wellness Collective" moved for summary judgment. Id. at 52. OPNET did not respond. Instead, OPNET released its lis pendens and filed a motion for voluntary dismissal pursuant to CR 41(a)(1)(B). The parties agreed that voluntary dismissal should be granted and that the summary judgment motion was moot. However, OPNET would not stipulate to a dismissal that included any attorney fee award, so Steven filed a separate motion for attorney fees.
¶ 11 The trial court dismissed the forfeiture case and awarded the Fagers the attorney fees incurred in the forfeiture case, as well as some of the fees incurred in the Fagers’ criminal cases. The Fagers did not request, and the court did not award, all of their criminal defense fees, however. Instead, the court awarded fees only "where the primary purpose behind the incurred fees was to prevent the forfeiture." Id. at 540. On OPNET’s request for clarification, the court confirmed that it was awarding fees to both Steven and Timothy because Timothy is "a part owner of DBVWC, Inc." Excerpt of Proceedings of Audio Verbatim Tr. (Aug. 5, 2015) (RP) at 67.
¶ 12 OPNET appealed. In an unpublished decision, the Court of Appeals, Division One, held that RCW 69.50.505(6) did not authorize the trial court to consider "factors unrelated to the civil forfeiture proceeding," such as " ‘the way in which the State approached the criminal case,’ " in awarding attorney fees. Olympic Peninsula Narcotics Enf’t Team v. Junction City Lots 1 through 12 Inclusive, No. 75635-4-1, slip op. at 14-15, 2017 WL 2242306 (unpublished) ( OPNET ) (underlining omitted), http://www.courts.wa.gov/opinions/pdf/756354.pdf. It also held that Steven appeared in the forfeiture proceeding only in his individual capacity and that DBVWC and Timothy never appeared at all, so Timothy could not be a claimant entitled to attorney fees. The Court of Appeals therefore affirmed in part, reversed in part, and remanded for the trial court to enter a corrected fee award as to Steven. We granted the Fagers’ petition for review.
¶ 13 A. Is Timothy a substantially prevailing claimant entitled to attorney fees in the forfeiture case?
¶ 14 B. Does RCW 69.50.505(6) give courts discretion to award attorney fees that a substantially prevailing claimant incurred in a related criminal proceeding for the purpose of resisting forfeiture?
¶ 15 C. Are the Fagers entitled to attorney fees incurred on review in this court?
¶ 16 In Washington, "a court may award [attorney] fees only when doing so is authorized by a contract provision, a statute, or a recognized ground in equity." King County v. Vinci Constr. Grands Projets/Parsons RCI/Frontier-Kemper, JV, 188 Wash.2d 618, 625, 398 P.3d 1093 (2017). The only basis asserted for attorney fees in this case is a statute, RCW 69.50.505(6). Attorney fee awards are reviewed for abuse of discretion.
Guillen v. Contreras, 169 Wash.2d 769, 774, 238 P.3d 1168 (2010). However, the underlying question of which fees may be awarded pursuant to the statute is a question of law reviewed de novo. Id.
¶ 17 In this case, OPNET did not waive or forfeit its argument that Timothy is not a claimant, and the record clearly shows that he is not. His status as a shareholder in DBVWC, a distinct corporate entity, does not make him a claimant. We therefore affirm the Court of Appeals in part and remand to the trial court to exclude from its fee award the fees that Timothy incurred in his criminal case.
¶ 18 We further hold that RCW 69.50.505(6) gives courts discretion to award attorney fees that a substantially prevailing claimant reasonably incurred in a related criminal case for the primary purpose of avoiding civil forfeiture. Here, the trial court properly exercised its discretion to award some of Steven’s criminal defense fees when he prevailed in the civil forfeiture case. We therefore reverse the Court of Appeals on this issue.3
¶ 19 Finally, we award Steven the attorney fees he incurred on review in this court as to the second issue, on which he substantially prevails.
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